SA’s food-processing industry lags behind global leaders, but shows promise for future growth, according to a recent report by Trade and Industrial Policy Strategies (TIPS) — an independent research institution based in Pretoria.
The report highlighted SA’s modest position in the global processed-food market. Despite accounting for only 0.5% of the global market share, the country has experienced consistent growth in food exports, particularly in African markets.
According to the report, this growth is largely driven by SA's strategic position as a key player in regional trade agreements, such as the African Continental Free Trade Area, which offers substantial opportunities for expansion into neighbouring markets.
The global food-processing market is dominated by countries such as Germany, the Netherlands and US, which benefit from advanced agricultural infrastructures, state-of-the-art food-processing technologies and supportive trade policies. In contrast, SA’s exports are primarily directed towards Africa, with a significant share going to the Southern African Development Community and Southern African Customs Union countries.
Despite its small global share, SA’s focus on regional markets presents opportunities for growth. The country’s food exports have grown over the years, with Africa emerging as the largest market, accounting for 34% of total food exports in 2023.
Still, SA's food-processing industry faces challenges, including climate change and energy shortages.
However, the report suggests that investments in renewable energy, sustainable agricultural practices and advanced food-processing techniques are poised to drive future growth.
According to the report, several SA companies, such as Tiger Brands and RFG Foods, are already leading efforts in integrating renewable energy sources and regenerative farming operations, while others, such as McCain Foods, are adopting regenerative farming practices. These initiatives are expected to enhance the resilience and competitiveness of SA’s agro-processing sector in the long term.
Further, the Industrial Development Corporation has reported approving investments worth R1.4bn in SA’s agriculture and agro-processing sector.
In terms of imports, SA relies heavily on the EU, which accounted for 33% of the country’s food imports in 2023. While this reliance on international markets presents challenges, it also underscores the potential for SA to diversify its import sources and strengthen its own production capabilities, the report notes.
“The sector’s growth is further supported by investments in advanced food-processing technologies and climate-smart agriculture, which are critical for meeting the evolving demands of consumers both locally and internationally,” according to the report.
Looking ahead, SA’s food-processing sector is poised for growth, driven by consumer demand for healthier and more sustainable food options. As the industry continues to adapt to global trends and challenges its strategic focus on regional markets and sustainable practices positions it well for future success.
According to the report, with the ongoing investments in innovation and sustainability SA is likely to strengthen its position not only in Africa but also in the broader global food- processing landscape.
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